Phillips v Rctd Holdings Ltd and Silver Point Villa Hotel Inc.
| Jurisdiction | Barbados |
| Judge | Alleyne, J. |
| Judgment Date | 07 March 2017 |
| Neutral Citation | BB 2017 HC 4 |
| Docket Number | 1526 of 2016 |
| Court | High Court (Barbados) |
| Date | 07 March 2017 |
High Court
Alleyne, J.
1526 of 2016
Mr. Dustin Delany in association with Mr. Shazard Mohammed for the applicant/claimant.
Mr. Amilcar Branche for the first and second respondents/defendants
Civil practice and procedure - Interlocutory application — Receivership — Undertaking in damages — Nature of an undertaking — Forms of orders sought — Whether the applicant was entitled to any of the orders sought — Whether the applicant was the duly appointed receiver/manager over the assets — Validity of the appointment — Whether the court had the power to grant an interim declaration — Interim injunction — Whether there was a serious question to be tried — Admissibility of evidence — Credibility — Whether exchange control permission was required — Whether failure to obtain permission rendered the transfer deed void — Whether the agreement alleged by the respondents existed — Balance of justice — Whether the balance of justice favoured the granting of the orders — Whether damages would be an adequate remedy — Freezing order — Whether the applicant had a good arguable case — Application for an order under CPR 17 for custody of the assets and for entry into and full possession and control of those assets.
This is an interlocutory application (“the application”) by which the applicant, Grenville Winslow Phillips, (“the applicant”) seeks the following orders:
“1. A declaration that the applicant/claimant is the duly appointed Receiver/Manager pursuant to the Deed of Appointment of Receiver and Manager dated the 14th day of November, 2016 over the property, assets and undertaking of the 1st and 2nd respondents/defendants (the “Property”);
2. An injunction pursuant to 17.1(1)(e) and Rule 17.4(1)(d) of the Civil Procedure Rules, 2008 (sic) (as amended) (sic) (“CPR”) restraining the 1st and 2nd respondents/defendants, their Directors, Shareholders, Agents or Servants from dealing with or removing any of the Property or in any way disposing of or dealing with or diminishing the value of the Property which are (sic) in the Island of Barbados, inclusive of all bank accounts, stocks, bonds and securities from the jurisdiction (sic);
3. An order that the applicant/claimant be granted custody of the Property pursuant to 17.1(1)(b) (i) CPR (sic);
4. An order for entry into and full possession and control of the Property by the applicant/claimant, his duly appointed and authorized Agents or Servants or otherwise howsoever (sic) the applicant/claimant may appoint pursuant to 17.1(1)(c) of the CPR;
5. An order that the 1st and 2nd respondents/defendants return any fixtures, books, records and other items appurtenant to the Property unlawfully removed prior to the granting of this Order of possession or subsequent to and accordance (sic) with an inventory generated by the applicant/claimant, that the said items identified therein be returned and/or restored to the control of the Receiver of the Property forthwith (sic);
6. An order prohibiting the Directors, Shareholders, Agents or Servants of the 1st and 2nd respondents/defendants from hindering or obstructing the applicant/claimant, his duly appointed and authorized Agents or Servants or otherwise howsoever (sic) the applicant/claimant may appoint from executing and/or exercising his duties as the duly appointed Receiver/Manager;
7. The costs of the application is (sic) to be borne by the respondents/defendants; and
8. Such further Orders and Directions as the court considers just and as the circumstances of the case warrant.”
I have determined that the application ought to be refused in its entirety. I set out my reasons below.
I will draw from the statements of case and affidavits to outline the background to the application. These comprise, on the applicant's part, the application, the applicant's affidavit filed on 18 November 2016 (“the applicant's first affidavit”), his affidavit filed on 19 December 2016 (“the applicant's second affidavit”), the claim form and statement of claim filed on 23 December 2016, and an affidavit sworn by Ms. Yoshodra Rampersaud, of Delany Law on 27 January 2017 (“the Rampersaud affidavit”).
The respondents filed three affidavits all of which were sworn by Mr. Roger Briggs Collins (“Mr. Collins”) and Mr. Damian Samuel Luke (“Mr. Luke”), directors of the respondents. These were filed on 7, 12 and 15 December 2016, respectively and I shall refer to them as “the respondents' first affidavit”, “the respondents' second affidavit” and “the respondents' third affidavit”, respectively.
The applicant claims that by a written instrument made on 14 November 2016 (“the deed of appointment”), WM Capital Partners 57 LLC (“WM Capital”), a United States based corporation, appointed him Receiver/Manager over the assets (“the assets”) of the second respondent/defendant (“Silver Point”). That appointment was purportedly made under powers contained in a Debenture dated 18 November 2005 (“the 2005 Debenture”) and made between the first respondent/defendant (“RCTD”), Silver Point, and BNB Finance & Trust Corporation (“BFTC”).
By the 2005 Debenture, Silver Point charged the assets in favour of BFTC to secure monies advanced by BFTC to RCTD under a loan facility. Mr. Collins and Mr. Luke executed a guarantee with respect to the loan facility (“the guarantee”). By 10 June 2008, the 2005 Debenture was stamped to secure an aggregate amount of $16,600.000.00, currency of Barbados.
RCTD and Silver Point defaulted on their loan repayment obligations under the 2005 Debenture. By a letter dated 19 November 2015, the attorneys-at-law for the lender had written to them demanding full payment. That letter stated their indebtedness to be $13,333,187.94, currency of Barbados. By then BFTC had changed its name to Republic Finance & Trust (Barbados) Corporation and the applicant asserts that another entity, Republic Bank (Barbados) Limited, had obtained an interest in the debt. I shall refer to these companies collectively as “Republic”.
So how does WM Capital enter the arena? It is the applicant's case that on 28 September 2016, Republic sold its interest, right and title to the loan and the guarantee to that entity; and that on 19 October 2016, Republic executed a deed assigning the 2005 Debenture to WM Capital (“the transfer deed”). By notices of the same date, Republic notified Silver Point Inc., RCTD Holdings and their Directors of the assignment.
Thereafter, the pace of events quickened as WM Capital wasted no time in moving to enforce the security. On 27 and 29 October 2016, they served demand letters and notices of intention to enforce a security on RCTD Holdings and Silver Point.
On 14 November 2016, the applicant filed a notice of “Registration of Enforcement of Security” with the Corporate and Intellectual Property Office and the Supervisor of Insolvency and served notice on RCTD and Silver Point to the effect that he had been appointed Receiver and Manager of Silver Point by WM Capital. On 15 and 16 November 2016, he sought to take possession of the assets but was prevented from doing so by RCTD and Silver Point. The latter companies dispute the validity of his appointment.
The applicant turned to the legal process for assistance. On 18 November 2016, he filed on a certificate of urgency, a document headed “Fixed Date Claim Form” together with the applicant's first affidavit.
Despite its heading, the “Fixed Date Claim Form” closely resembled an application made pursuant to Part 11 of the Supreme Court Civil Procedure Rules, 2008 (“CPR”). CPR 11 provides for the making of applications for orders before, during or after proceedings. Yet, it had attached to it the “prescribed notes for defendants” which claimants are required by CPR 8.12(1)(c) to serve on defendants.
RCTD and Silver Point must have been served since they filed a counterclaim and the respondents' first affidavit on 7 December 2016.
The matter came on for hearing before me on 8 December 2016 but was adjourned to 14 December 2016. The respondents' documents had not yet reached me and, in any event, time would not have permitted me to hear a contested application when it was called. However, before the adjournment was taken, in response to the Court, Mr. Shazard Mohammed indicated that what was intended to be before me was an application for interlocutory relief. He had appeared in association with Ms. Rampersaud for the applicant and Mr. Amilcar Branche for RCTD and Silver Point.
On the adjourned date, Mr. Dustin Delany appeared for the applicant with Mr. Mohammed, and, as before, Mr. Branche appeared for the respondents. After hearing submissions on the procedural conundrum created by the applicant, I granted a consent order to facilitate the hearing of the applicant's document headed “Fixed Date Claim Form” as if it were an interlocutory application. The hearing of the application was then scheduled for 21 and 22 December 2016.
Thus, with the co-operation of Mr. Branche and a common acknowledgement that justice ought not to be delayed as form triumphs over substance, the application was transplanted from the sandy procedural ground on which it struggled to take root, and set on a firmer 5 footing. Nonetheless, the hearing of the application was further delayed by other procedural issues.
The consent order included a term that the existing affidavits were to stand in support of or opposition to the application, as the case may be, with each party being permitted to file further affidavits. The counterclaim was struck out to allow for a fresh start and the applicant was ordered to file his claim form by 18 November 2016. He did not comply with the latter order. Rather, on 16 December 2016, he filed a document headed...
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